‘Used remote working during Covid to set up illegal operations… transferred funds to acquire two properties in London’: ED chargesheet against Viresh Joshi

The ED has claimed that Joshi, arrested in August, is the ‘mastermind’ of a fraud where confidential insider information was used to conduct illegal trading activities, adversely impacting the financial standing of Axis Mutual Fund (AMF) and its investors. The ED has said that the total assets under management with the AMF are approximately Rs 2.50 lakh crore. These are investments made by its investors including small retail investors, common people at large. These funds are supposed to be used for making investments in the capital markets by the mutual fund. Joshi was given the responsibility as a dealer for the mutual fund to make these investments and therefore had access to price sensitive information for impending trades of AMF. Joshi was found to be passing on information to his accomplices for personal gains.

Front-running is when non-public information is used to buy or sell securities or enter into options or any futures contracts, before a substantial order by a big client, so that when the information becomes public, the price of such securities may change. The ED has in its prosecution complaint relied on bank accounts of Joshi and his family members, their statements as well as pending probes by the Securities and Exchange Board of India (SEBI) and information provided by the National Stock Exchange (NSE) to investigate Joshi.

Referring to an ex-parte SEBI order passed in 2023, the ED has said that AMF had allowed dealers the option of working from home during the Covid-19 pandemic. Bloomberg software was installed in the office laptop of dealers, which was not allowed otherwise, and they were provided separate dealing norms to ensure social distancing. Unlike strict norms for dealers in regular times, there was less physical supervision and the privileges were grossly misused by Joshi to pass sensitive information to third persons for executing front-running trades for illegal and unlawful financial gain, the ED has claimed.

“Before the Covid period, instances of front-running were limited as the dealer room was highly monitored, hence the profit share was also in small quantities, and was transferred directly through bank accounts of traders. However, during the Covid period, work from home was allowed and there was no proper monitoring of dealer activities. Hence, Viresh Joshi used to pass on large number of confidential information with his close confidantes and the profit share was eventually increased,” the ED has said.

The ED has relied on the statement of a compliance officer of Axis Assets Management Group, who said that SEBI had orally informed them about a correlation with AMF and other market trades, following which forensic auditors were appointed. During the investigation, communication between Joshi and a developer regarding property transaction and car parking slot was observed, which raised suspicion. It was also claimed that an additional email ID used by Joshi was found which he had not initially disclosed. The ED claims that the dedicated Bloomberg terminal was used by Joshi to place and negotiate orders not just of AMF but others as well, which is against rules.

The statement of one of his colleagues said that it was observed that he was having personal chats on the software. The ED has said that the NSE informed it in an email dated June 2025 that it had grouped beneficiaries on parameters like common phone numbers, common addresses, and emails, in 48 different groups, based on which total profits from the alleged fraud are estimated to be Rs 108 crore, identifying companies with which Joshi’s family allegedly transacted.

Further, the ED has given details of transactions showing transfer of funds between Kolkata-based shell entities into bank accounts of his close family members, which they could not provide any explanation for, claiming that the accounts were handled by Joshi. The ED has said that a terminal was set up in Dubai through his family members and accomplices for the front-running transactions and money earned was collected in cash and subsequently layered through shell entities and by showing unsecured loans by his brother. The ED has also flagged bank accounts of his wife, who worked as a makeup artist, his sister-in-law, who provides tiffin service, and his niece, where unexplained high-value transactions were seen. The ED questioned his wife about the two London properties purchased in 2021 and 2023, and properties in Mumbai, including two flats in Trump Tower, purchased in 2019, to which she has said that she is not aware of the funds as her husband managed the transactions.

Joshi had allegedly met co-accused Sumit Desai at a get-together party for traders in 2021, and was subsequently roped in for the alleged illegal trading, with 10 per cent of profits shared by him, earning Rs 2 crore, as per the ED. SEBI in its order in 2023 had imposed a penalty of Rs 30.55 crore on various persons based on its probe into seven months of trade, into illegal gains. The ED has claimed that it is suspected the gains are much higher.

Joshi, in his bail plea filed last month, had said that during his 14-year tenure, “demonstrated exemplary performance and was promoted to Senior Vice President in 2019”, and had no discretion over the trade, denying illegal gains.

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